Eight years for insider trading duo
TWO senior finance professionals from the North West have been sentenced to a combined eight years’ imprisonment, having been found guilty of insider trading.
Martyn Dodgson, a former Deutsche Bank managing director from Lancaster, and Rochdale-born University of Manchester graduate Andrew Hind, who rose to become Sir Philip Green’s finance director at Topshop, have been sentenced for four and a half years and three and a half years respectively.
Dodgson’s sentence is the longest ever handed down for insider dealing in a case brought by the Financial Conduct Authority. Confiscation proceedings will also be pursued against both defendants.
The pair were convicted of conspiring to insider deal between November 2006 and March 2010, which generated profits of £7.4m, by majority verdicts at Southwark Crown Court last week.
In sentencing Dodgson and Hind Judge Pegden remarked that their offending was “persistent, prolonged, deliberate, dishonest behaviour.”
The insider trades uncovered by the FCA during Operation Tabernula – which is Latin for “little tavern” – included a £4.4m profit on Heineken and Carlsberg’s takeover of Scottish & Newcastle and a £1m profit on a bid by News Corp for the remainder of BSkyB.
Dodgson and Hind, who were close personal friends, instigated the insider dealing conspiracy, and agreed to deal secretly, sometimes on the basis of inside information.
Dodgson sourced inside information from within the investment banks at which he worked, either through working on transactions himself or through being able to glean what his colleagues were working on. He passed on this inside information to Hind who acted as a middle man. Hind then effected secret dealing for the benefit of Dodgson and himself.
The defendants put in place elaborate strategies designed to prevent the authorities from uncovering their activities. These included the use of unregistered mobile phones, encoded and encrypted records, safety deposit boxes and the transfer of benefit using cash and payments in kind.
In many cases Dodgson or his employer was advising or connected with the company traded or the corporate transaction. The FCA relied on five acts of insider dealing to prove this conspiracy. The trading profits were distributed via large cash payments and payments in kind.
Mark Steward, director of enforcement and market oversight at the FCA, said: “This case involved serious offending over a number of years, conducted in a sophisticated way using deliberate techniques to avoid detection. Dodgson was an approved person who was entrusted by his employer with sensitive and valuable information. He betrayed that trust by exploiting the information for his own benefit, conspiring with Hind to deceive the market
“Insider dealing is ever more detectable and provable. And this case shows lengthy terms of imprisonment, not profits are the real result.”
Oliver Higgins, National Crime Agency branch commander, said: “Dodgson and Hind tried to prevent us from uncovering their insider dealing by using unregistered mobile phones, encoded and encrypted records, and transferring benefit using cash and payments in kind.
“The NCA were able to support the FCA by carrying out surveillance and providing niche capabilities, including the deployment and monitoring of a listening device that recorded key conversations.”
